Is Net Energy Peaking?

When most people think of fossil fuel supplies, they think in terms of barrels of oil, cubic feet of natural gas and tons of coal. But in evaluating how much energy in the form of finite fossil fuels the world has left, these are no longer adequate measurements.

In the 1930s
when wildcatters in Texas were striking oil almost as quickly as they
could drill, the energy cost of getting 100 barrels of oil out of the
ground was just one barrel. The net energy from this oil, that is, the
energy available to the non-energy sectors of society, was very high.
Today, oil companies have exhausted the easy-to-get oil and are obliged
to drill in such places as the Arctic and in ocean waters that are a
mile or two deep before drilling another one to three miles under the
seabed.

There are various methods for calculating EROI which is
why a range of ratios is often quoted in response to a question about
the EROI of any particular energy source. Regardless of method the EROI
trend for fossil fuels is down. Obviously, if the EROI for any fuel were
to reach 1:1 or fall below it, it would cease to be a fuel. If the EROI
is greater than one, then we can say that the fuel or energy system
provides net energy to society. In other words, after we subtract the
energy needed to extract, transport, refine and deliver that energy to
where it's needed, we have some surplus that can actually be used.

What
EROI tells us then is the proportion of the energy embodied in a fuel
or energy system available to the non-energy sectors of society. What
we'd like to know is the total net energy available to society expressed
in some suitable physical units such as quads (quadrillion British
Thermal Unit or BTUs). The net energy of any system, say, a
hydroelectric dam or a wind generator, is dependent on location; water
levels or average wind speeds; the intensity of (energy-consuming)
maintenance; and so on. This same principle applies to fossil fuels as
illustrated for oil above. This is critical since 86 percent of the
world's energy comes from fossil fuels. There is, however, no average
EROI which we can calculate for all sources of one type of energy. Coal
delivered to a nearby electric generating plant will have a different
EROI than coal which must be transported hundreds or even thousands of
miles before being burned. We can make some educated guesses about EROI
for a particular type of resource, but the complete data for society as a
whole are just not there.

Still, the principle is sound. Society
runs on net energy. If net energy is declining for fossil fuels, that
implies that even increases in total extraction may not offset
the growing amount of energy needed by the energy industry. In other
words rising tonnage of coal, barrels of oil or cubic feet of natural
gas could be accompanied by decreases in total energy available
to the non-energy producing part of the economy. Has this ever happened?
Apparently, it has.

We are told that new
unconventional reserves of fossil fuels will pave the way to an energy
future still dominated by those fuels. Even if we set aside the question
of whether it is wise to burn such fuels in a world facing climate
change, the fossil fuel optimists are still pretending that net energy
doesn't matter, only gross extraction rates. When confronted with this
issue, they often respond that new (yet-to-be invented!) technology will
increase the net energy from such unconventional reserves as tar sands,
heavy oil, deepwater oil and shale gas. But this flies in the face of
the general trend in fossil fuel EROI which has been declining even as
advanced technologies for exploration, extraction and refining have been
deployed. That would imply that geological constraints are now winning
the race with technology.

Even the most sanguine fossil fuel
optimists admit that all fossil fuels will eventually peak in their rate
of production and then decline. It is worth remembering that the point at
which society will start experiencing problems with fossil fuel supplies
in not when they are exhausted, but when their rate of production
begins to decline. This is true because our financial system and society
are addicted to growth, and that growth depends currently on a
commensurate growth in fossil fuel supplies.

By extension and
using our understanding of net energy, it is possible to see that
society will start experiencing problems not when fossil fuel supplies
peak, but when the net energy from fossil fuels peaks. That peak
logically must come before the peak in gross extractions of fossil fuels
because human societies have exploited the easy-to-get fossil fuels
first. The more difficult and energy-intensive resources await our
exploitation, and that exploitation will become increasingly
energy-intensive as we repeat the pattern of extracting the
easiest-to-get portion of the difficult-to-get resources first.

So,
even if one believes, for example, that the rate of oil production will
not peak for another couple of decades, the peak in oil-based energy
available to society, that is net energy, will come sooner, perhaps much
sooner. There is no definitive way to tell when net energy from fossil
fuels will peak or whether it has already peaked. Much more research
needs to be done, and soon! But the logic of net energy tells us that we
should view the transition away from fossil fuels to alternatives with
much greater urgency even if the optimists are right.